FINANCIAL ACCOUNTING 1

Submitted By:

Muhammad Abrar Najeeb

REG# CIIT/FA07-BS (BA)-017/WAH

Submitted to:

SIR DILNAWAZ

DEPARTMENT OF MANAGEMENT SCIENCES

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY,
WAH CANTT – PAKISTAN

1
 In the name of

Allah Almighty,

The Most Gracious,

The Merciful

2
 Accounting Sheet

Company Name

Chaudary Motors Service Company

For The Month Of

October, 2005

3
Transactions:

1. Oct, 02 Started a new Business with Rs. 50,000.

2. Oct, 03 Purchased a building of Rs. 32,000 paid cash Rs. 10,000 & note
payable is Rs. 22,000.
3. Oct, 03 Purchased furniture of Rs. 2,000.
4. Oct, 04 Purchased tools of Rs. 15,000 on account.
5. Oct, 05 Paid equipment rent Rs. 500.
6. Oct, 06 Receive repair revenue of Rs. 5,000.
7. Oct, 07 Purchased auto parts of Rs. 1,600 on account.
8. Oct, 09 Paid wages Rs. 1400 by cash.
9. Oct, 11 Paid utility bills Rs. 2,000 in cash.
10. Oct, 12 Repair a car on account & revenue is Rs. 2,000.
11. Oct, 12 Paid Advertisement expense Rs. 400 by cash.
12. Oct, 13 Paid Rs. 7,900 of account payables of tools.
13. Oct, 14 Purchased auto parts of Rs. 4,000.
14. Oct, 14 Receive repair revenue of Rs. 10,000.
15. Oct, 16 Receive account receivable of Rs. 1,500.
16. Oct, 17 Purchased a computer of Rs. 6,000.
17. Oct, 19 Paid wages of Rs. 1,600 in cash.
18. Oct, 24 Purchased a Motor Bike of Rs. 30,000.
19. Oct, 25 Receive repair revenue of Rs. 7,000.
20. Oct, 27 Repair a motor on account & revenue is Rs. 8,000.

4
 Chaudary Motors Service Company
General Journal
For The Month of October, 2007

Date Description Ref Debit(Rs.) Credit(Rs.)

Oct, 02 Cash 50,000
Capital Stock 50,000
(Started a new Business)
Oct, 03 Building 32,000
Cash 10,000
Note Payable 22,000
(Purchased Building)
Oct,03 Furniture 2,000
Cash 2,000
(Purchased Furniture)
Oct, 04 Tools 15,000
Account Payable 15,000
(Purchased Tools)
Oct, 05 Equipment Rent 500
Cash 500
(Pay Equipment rent)
Oct, 06 Cash 5,000
Repair Revenue 5,000
(Receive Revenue)
Oct, 07 Auto Parts 1,600
Account Payable 1,600
(Purchased Auto Parts)
Oct, 09 Wages Expense 1,400
Cash 1,400
(Paid Wages)
Oct,11 Utility Expense 2,000
Cash 2,000
(Paid Utility Bills)
Oct,12 Account Receivable 2,000
Repair Revenue 2,000
(Repair a car on account)
Oct, 12 Advertisement Expense 400
Cash 400
(Paid Advertisement expense)
Oct, 13 Account Payable (Tools) 7,900
Cash 7,900
(Paid liability)
Oct, 14 Auto Parts 4,000
Cash 4,000
(Purchased Auto Parts)
Oct, 14 Cash 10,000
Repair Revenue 10,000
(Receive Revenue)

5
Oct, 16 Cash 1,500
Account Receivable 1,500
(Receive Account in cash)
Oct,17 Computer 6,000
Cash 6,000
(Purchased a Computer)
Oct, 19 Wages Expense 1,600
Cash 1,600
(paid wages)
Oct, 24 Motor Bike 30,000
Cash 30,000
(Purchased a Motor Bike)
Oct, 25 Cash 7,000
Repair Revenue 7,000
(Receive Revenue)
Oct, 27 Account Receivable 8,000
Repair Revenue 8,000
(Receive Revenue in Account)

6
 LEDGERS

1. Cash
2. Capital Stock
3. Building
4. Note Payable
5. Furniture
6. Tools
7. Account Payable
8. Equipment Rent
9. Revenue
10. Auto Parts
11. Wages Expense
12. Utility Expense
13. Account Receivable
14. Advertisement Expense
15. Computer
16. Motor Bike

Chaudary Motors Service Company

Cash’s Ledger
For The Month of October, 2007
Date Debit Rs. Date Credit Rs.
Oct, 02 Capital Stock 50,000 Oct, 03 Building 10,000
Oct, 06 Repair Revenue 5,000 Oct, 03 Furniture 2,000
Oct, 14 Repair Revenue 10,000 Oct, 05 Rent 500
Oct, 16 Account Receivable 1500 Oct, 09 Wages Expense 1,400
Oct, 25 Repair Revenue 7,000 Oct, 11 Utility Expense 2,000
Oct, 12 Advertisement Expense 400
Oct, 13 Account Payable 7,900
Oct, 14 Auto Parts 4,000
Oct, 17 Computer 6,000
Oct, 19 Wages Expense 1,600
Oct, 24 Motor Bike 30,000
Balance(Dr.) 7,700
Total 73,500 Total 73,500

7
 Chaudary Motors Service Company
Capital Stock’s Ledger
For The Month of October, 2007
Date Debit Rs. Date Credit Rs.
Oct, 02 Capital Stock (cash) 50,000
Balance(Cr.) 50,000
Total 50,000 Total 50,000

Chaudary Motors Service Company

Building’s Ledger
For The Month of October, 2007
Date Debit Rs. Date Credit Rs.
Oct, 03 Building 32,000
Balance(Dr.) 32,000
Total 32,000 Total 32,000

Chaudary Motors Service Company

Note Payables Ledger
For The Month of October, 2007
Date Debit Rs. Date Credit Rs.
Oct, 03 Building 22,000
Balance(Cr.) 22,000
Total 22,000 Total 22,000

Chaudary Motors Service Company

Furniture’s Ledger
For The Month of October, 2007
Date Debit Rs. Date Credit Rs.
Oct, 03 Furniture 2,000
Balance(Dr.) 2,000
Total 2,000 Total 2,000

8
 Chaudary Motors Service Company
Tool’s Ledger
For The Month of October, 2007
Date Debit Rs. Date Credit Rs.
Oct, 04 Tools 15,000
Balance(Dr.) 15,000
Total 15,000 Total 15,000

Chaudary Motors Service Company

Account Payables Ledger
For The Month of October, 2007
Date Debit Rs. Date Credit Rs.
Oct, 13 Tools 7,900 Oct, 04 Tools 15,000
Balance(Cr.) 8,700 Oct, 07 Auto Parts 1,600
Total 16,600 Total 16,600

Chaudary Motors Service Company

Equipment Rent’s Ledger
For The Month of October, 2007
Date Debit Rs. Date Credit Rs.
Oct, 05 Equipment Rent 500
Balance(Dr.) 500
Total 500 Total 500

Chaudary Motors Service Company

Revenue’s Ledger
For The Month of October, 2007
Date Debit Rs. Date Credit Rs.
Oct, 06 Cash 5,000
Oct, 12 Account Receivable 2,000
Oct, 14 Cash 10,000
Oct, 25 Cash 7,000
Balance(Cr.) 32,000 Oct, 27 Account Receivable 8,000
Total 32,000 Total 32,000

9
 Chaudary Motors Service Company
Auto Part’s Ledger
For The Month of October, 2007
Date Debit Rs. Date Credit Rs.
Oct, 07 Auto Part 1,600
Oct, 14 Auto Part 4,000 Balance(Dr.) 5,600
Total 5,600 Total 5,600

Chaudary Motors Service Company

Wage Expense’s Ledger
For The Month of October, 2007
Date Debit Rs. Date Credit Rs.
Oct, 09 Wages 1,400
Oct, 19 Wages 1,600 Balance(Dr.) 3,000
Total 3,000 Total 3,000

Chaudary Motors Service Company

Utility Expense’s Ledger
For The Month of October, 2007
Date Debit Rs. Date Credit Rs.
Oct, 11 Utility 2,000
Balance(Dr.) 2,000
Total 2,000 Total 2,000

Chaudary Motors Service Company

Account Receivables Ledger
For The Month of October, 2007
Date Debit Rs. Date Credit Rs.
Oct, 12 Revenue 2,000 Oct, 16 Revenue 1,500
Oct, 27 Revenue 8,000 Balance(Dr.) 8,500
Total 10,000 Total 10,000

10
 Chaudary Motors Service Company
Advertisement Expense’s Ledger
For The Month of October, 2007
Date Debit Rs. Date Credit Rs.
Oct, 12 Cash 400
Balance(Dr.) 400
Total 400 Total 400

Chaudary Motors Service Company

Computer’s Ledger
For The Month of October, 2007
Date Debit Rs. Date Credit Rs.
Oct, 17 Cash 6,000
Balance(Dr.) 6,000
Total 6,000 Total 6,000

Chaudary Motors Service Company

Motor Bike’s Ledger
For The Month of October, 2007
Date Debit Rs. Date Credit Rs.
Oct, 24 Cash 30,000
Balance(Dr.) 30,000
Total 30,000 Total 30,000

11
 Trial Balance

Chaudary Motors Service Company

Trial Balance
For The Month of October, 2007
Description Debit Credit
1. Cash 7,700
2. Capital Stock 50,000
3. Building 32,000
4. Note Payable 22,000
5. Furniture 2,000
6. Tools 15,000
7. Account Payable 8,700
8. Equipment Rent 500
9. Revenue 32,000
10. Auto Parts 5,600
11. Wages Expense 3,000
12. Utility Expense 2,000
13. Account Receivable 8,500
14. Advertisement Expense 400
15. Computer 6,000
16. Motor Bike 30,000
Total 112,700 112,700

Income Statement
12
 Chaudary Motors Service Company
Income Statement
For The Month of October, 2007
Description Rs. Rs.
Revenue/Income:
Revenue 32,000

Expense:
Wages Expense 3,000
Utility Expense 2,000
Advertisement Expense 400
Equipment Rent 500 5900
Net Income 26100

Balance Sheet

Chaudary Motors Service Company

Balance Sheet
For The Month of October, 2007
Assets Rs. Liability + Owner’s Equity Rs.
Current Assets: Current Liabilities:
Cash 7,700 Note Payable 22,000
Account Receivable 8,500 Account Payable 8,700
Non-Current Assets: Non-Current Liabilities:
Building 32,000
Furniture 2,000
Tools 15,000
Auto Parts 5,600
Computer 6,000
Motorbike 30,000
Owner’s Equity:
Capital Stock 50,000
Net Income 26,100
Total 106,800 Total 106,800

Other Data

13
Adjusting transaction:

1. 31 December: Rs. 1,000 of accrued but unpaid wages has been paid.

2. 31 December: Rs. 2,000 of unpaid rent has been paid.

3. 31 December: Total cost of Furniture is Rs. 2,000 and estimated life is 5

years. Depreciation is charged per year.

4. 31 December: Rs. 200 of accrued but not paid utility expense has been paid.

5. 31 December: Rs. 400 of unpaid Advertisement has been paid.

6. 31 December: Total cost of Building is Rs. 32,000 and estimated life is 10

years. Depreciation is charged per year.

7. 31 December: Accrued but Uncollected Revenue of Rs. 8,000 have been

received.

8. 31 December: Unearned Revenue of Rs. 6,000 has been earned.

9. 31 December: Total cost of Computer is Rs. 6,000 and estimated life is 6

years. Depreciation is charged per year.

10. 31 December: Unpaid Income Tax of Rs. 5000 has been paid.

Adjusted General Journal

14
 Chaudary Motors Service Company
Adjusted General Journal
For The Ended Year of 2007
Date Description Ref Debit(Rs.) Credit(Rs.)
Oct, 02 Cash 50,000
Capital Stock 50,000
(Started a new Business)
Oct, 03 Building 32,000
Cash 10,000
Note Payable 22,000
(Purchased Building)
Oct,03 Furniture 2,000
Cash 2,000
(Purchased Furniture)
Oct, 04 Tools 15,000
Account Payable 15,000
(Purchased Tools)
Oct, 05 Equipment Rent 500
Cash 500
(Pay Equipment rent)
Oct, 06 Cash 5,000
Repair Revenue 5,000
(Receive Revenue)
Oct, 07 Auto Parts 1,600
Account Payable 1,600
(Purchased Auto Parts)
Oct, 09 Wages Expense 1,400
Cash 1,400
(Paid Wages)
Oct,11 Utility Expense 2,000
Cash 2,000
(Paid Utility Bills)
Oct,12 Account Receivable 2,000
Repair Revenue 2,000
(Repair a car on account)
Oct, 12 Advertisement Expense 400
Cash 400
(Paid Advertisement expense)
Oct, 13 Account Payable (Tools) 7,900
Cash 7,900
(Paid liability)
Oct, 14 Auto Parts 4,000
Cash 4,000
(Purchased Auto Parts)
Oct, 14 Cash 10,000
Repair Revenue 10,000
(Receive Revenue)
Oct, 16 Cash 1,500

15
 Account Receivable 1,500
(Receive Account in cash)
Oct,17 Computer 6,000
Cash 6,000
(Purchased a Computer)
Oct, 19 Wages Expense 1,600
Cash 1,600
(paid wages)
Oct, 24 Motor Bike 30,000
Cash 30,000
(Purchased a Motor Bike)
Oct, 25 Cash 7,000
Repair Revenue 7,000
(Receive Revenue)
Oct, 27 Account Receivable 8,000
Repair Revenue 8,000
(Receive Revenue in Account)
Dec.31 Wages Expense 1,000
Wages Payable 1,000
(paid, unpaid wages)
Dec.31 Rent Expense 2,000
Rent Payable 2,000
(paid, unpaid rent)
Dec.31 Depreciation Expense (Furniture) 400
Accumulated Depreciation 400
(Depreciation of Furniture)
Dec.31 Utility Expense 200
Utility Payable 200
(paid, unpaid utility bills)
Dec.31 Advertisement Expense 400
Advertisement Payable 400
(unpaid Advertisement expense)
Dec.31 Depreciation Expense (Building) 3,200
Accumulated Depreciation 3,200
(Depreciation of Building)
Dec.31 Uncollected Revenue 8,000
Revenue 8,000
(Received uncollected revenue)
Dec.31 Unearned Revenue 6,000
Revenue 6,000
(provide service payable)
Dec.31 Depreciation Expense(Computer) 1,000
Accumulated Depreciation 1,000
(Depreciation of Computer)
Dec.31 Income Tax Expense 5,000
Income Tax Payable 5,000
(paid, unpaid income tax)
Adjusted Ledgers

16
 Chaudary Motors Service Company
Wage Expense’s Ledger
For The Ended Year of 2007
Date Debit Rs. Date Credit Rs.
Oct, 09 Wages 1,400
Oct, 19 Wages 1,600
Dec, 31 Wages Payable 1,000 Balance(Dr.) 4,000
Total 4,000 Total 4,000

Chaudary Motors Service Company

Wage Payable Ledger
For The Ended Year of 2007
Date Debit Rs. Date Credit Rs.
Dec, 31 Wages Expense 1,000
Balance(Cr.) 1,000
Total 1,000 Total 1,000

Chaudary Motors Service Company

Rent Expense’s Ledger
For The Ended Year of 2007
Date Debit Rs. Date Credit Rs.
Dec, 31 Rent Payable 2,000
Balance(Dr.) 2,000
Total 2,000 Total 2,000

Chaudary Motors Service Company

Rent Payable Ledger
For The Ended Year of 2007
Date Debit Rs. Date Credit Rs.
Dec, 31 Rent Expense 2,000
Balance(Cr.) 2,000
Total 2,000 Total 2,000

Chaudary Motors Service Company

17
 Depreciation Expense’s Ledger
For The Ended Year of 2007
Date Debit Rs. Date Credit Rs.
Dec, 31 Acc. Depreciation 400
Dec, 31 Acc. Depreciation 3,200
Dec, 31 Acc. Depreciation 1,000 Balance(Dr.) 4,600
Total 4,600 Total 4,600

Chaudary Motors Service Company

Accumulated Depreciation’s Ledger
For The Ended Year of 2007
Date Debit Rs. Date Credit Rs.
Dec, 31 Depreciation Expense 400
Dec, 31 Depreciation Expense 3,200
Balance(Cr.) 4,600 Dec, 31 Depreciation Expense 1,000
Total 4,600 Total 4,600

Chaudary Motors Service Company

Utility Expense’s Ledger
For The Ended Year of 2007
Date Debit Rs. Date Credit Rs.
Oct, 11 Utility 2,000
Dec, 31 Utility Payable 200 Balance(Dr.) 2,200
Total 2,200 Total 2,200

Chaudary Motors Service Company

Utility Payable Ledger
For The Ended Year of 2007
Date Debit Rs. Date Credit Rs.
Dec, 31 Utility Expense 200
Balance(Cr.) 200
Total 200 Total 200

Chaudary Motors Service Company

18
 Advertisement Expense’s Ledger
For The Ended Year of 2007
Date Debit Rs. Date Credit Rs.
Oct, 12 Cash 400
Dec, 31 Advertisement Payable 400 Balance(Dr.) 800
Total 800 Total 800

Chaudary Motors Service Company

Advertisement Payable Ledger
For The Ended Year of 2007
Date Debit Rs. Date Credit Rs.
Dec, 31 Advertisement Expense 400
Balance(Cr.) 400
Total 400 Total 400

Chaudary Motors Service Company

Uncollected Revenue’s Ledger
For The Ended Year of 2007
Date Debit Rs. Date Credit Rs.
Dec, 31 Revenue 8,000
Balance(Dr.) 8,000
Total 8,000 Total 8,000

Chaudary Motors Service Company

Unearned Revenue’s Ledger
For The Ended Year of 2007
Date Debit Rs. Date Credit Rs.
Dec, 31 Revenue 6,000
Balance(Dr.) 6,000
Total 6,000 Total 6,000

Chaudary Motors Service Company

19
 Revenue’s Ledger
For The Ended year of 2007
Date Debit Rs. Date Credit Rs.
Oct, 06 Cash 5,000
Oct, 12 Account Receivable 2,000
Oct, 14 Cash 10,000
Oct, 25 Cash 7,000
Oct, 27 Account Receivable 8,000
Dec, 31 Uncollected Revenue 8,000
Balance(Cr.) 46,000 Dec, 31 Unearned Revenue 6,000
Total 46,000 Total 46,000

Chaudary Motors Service Company

Income Tax Expense’s Ledger
For The Ended Year of 2007
Date Debit Rs. Date Credit Rs.
Dec, 31 Income Tax Payable 5,000
Balance(Dr.) 5,000
Total 5,000 Total 5,000

Chaudary Motors Service Company

Income Tax Payable Ledger
For The Ended Year of 2007
Date Debit Rs. Date Credit Rs.
Dec, 31 Income Tax Expense 5,000
Balance(Cr.) 5,000
Total 5,000 Total 5,000

Adjusted Trial Balance

20
 Chaudary Motors Service Company
Adjusted Trial Balance
For The Ended Year of 2007
Description Debit Credit
Cash 7,700
Capital Stock 50,000
Building 32,000
Note Payable 22,000
Furniture 2,000
Tools 15,000
Account Payable 8,700
Equipment Rent 500
Revenue 46,000
Auto Parts 5,600
Wages Expense 4,000
Utility Expense 2,200
Account Receivable 8,500
Advertisement Expense 800
Computer 6,000
Motor Bike 30,000
Wages Payable 1,000
Rent Expense 2,000
Rent Payable 2,000
Depreciation Expense 4,600
Accumulated Depreciation 4,600
Utility Payable 200
Advertisement Payable 400
Uncollected Revenue 8,000
Unearned Revenue 6,000
Income Tax Expense 5,000
Income Tax Payable 5,000
Total 139,900 139,900

Adjusted Income Statement

21
 Chaudary Motors Service Company
Adjusted Income Statement
For The Ended Year of 2007
Description Rs. Rs.
Revenue/Income:
Revenue 46,000

Expense:
Wages Expense 4,000
Utility Expense 2,200
Advertisement Expense 800
Equipment Rent 500
Rent Expense 2,000
Depreciation Expense 4,600
Income Tax Expense 5,000 14,100
Net Income 26,900

Adjusted Balance Sheet

Chaudary Motors Service Company
Adjusted Balance Sheet
For The Ended Year of 2007
Assets Rs. Liability + Owner’s Equity Rs.
Current Assets: Current Liabilities:
Cash 7,700 Note Payable 22,000
Account Receivable 8,500 Account Payable 8,700
Uncollected Revenue 8,000 Wages Payable 1,000
Unearned Revenue 6,000 Rent Payable 2,000
Utility Payable 200
Advertisement Payable 400
Income Tax Payable 5,000
Non-Current Assets: Non-Current Liabilities:
Building 32,000
Furniture 2,000
Tools 15,000
Auto Parts 5,600
Computer 6,000
Motorbike 30,000
Owner’s Equity:
Capital Stock 50,000
Net Income 26,900
Accumulated Depreciation 4,600
Total 120,800 Total 120,800

22